Bill Text: NJ S4415 | 2026-2027 | Regular Session | Comm Sub
Bill Title: Strengthens oversight and enforcement of network adequacy requirements for health insurance carriers; requires health insurance carriers to make network directory available.
Sponsorship: Partisan Bill (Democrat 2)
Status: (Introduced) 2026-06-11 - Referred to Senate Budget and Appropriations Committee [S4415 Detail]
Download: New_Jersey-2026-S4415-Comm_Sub.html
SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 4415
STATE OF NEW JERSEY
222nd LEGISLATURE
ADOPTED JUNE 11, 2026
Sponsored by:
Senator JOSEPH F. VITALE
District 19 (Middlesex)
Senator NICHOLAS P. SCUTARI
District 22 (Somerset and Union)
SYNOPSIS
Strengthens oversight and enforcement of network adequacy requirements for health insurance carriers; requires health insurance carriers to make network directory available.
CURRENT VERSION OF TEXT
Substitute as adopted by the Senate Health, Human Services and Senior Citizens Committee.
An Act concerning access to health care services and amending P.L.2018, c.32.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.2018, c.32 (C.26:2SS-2) is amended to read as follow:
2. The Legislature finds and declares that:
a. (1) The health care delivery system in New Jersey needs reforms that will enhance consumer protections, ensure that residents receive adequate access to critical health care services in all regulated markets, ensure that carriers comply with State contracts and plan provisions regarding provision of adequate, accessible, timely networks, create a system to resolve certain health care billing disputes, contain rising costs, include robust penalties to ensure that carriers comply with network adequacy requirements, enhance transparency regarding these important requirements, promote accountability to the public, and measure success with respect to these goals;
(2) Objective evidence, including independent audits, third-party secret shopper surveys, claims data analysis, and more informal, anecdotal evidence has demonstrated that many carriers are not providing adequate health care networks for some or many types of services. These same examinations have demonstrated that State oversight agencies, including the Department of Banking and Insurance and the Division of Medical Assistance and Health Services in the Department of Human Services, are not adequately overseeing carriers through annual network adequacy submissions, market conduct reviews, secret shopper surveys, and other means to ensure that carriers they regulate are meeting their statutory and contractual network adequacy requirements. Collectively, these failures lead patients to bear long wait times for appointments, unnecessary visits to emergency departments, forego medical care, and poor health care outcomes and higher costs;
b. Despite existing State and federal laws and regulations to protect against certain surprise out-of-network charges, these charges continue to pose a problem for health care consumers in New Jersey. Many consumers find themselves with surprise bills for hospital emergency room procedures or for charges by providers that the consumer had no choice in selecting;
c. While the Patient Protection and Affordable Care Act added new patient protections requiring federally-regulated group health plans to reimburse for out-of-network emergency service by paying the greatest of three possible amounts: (1) the amount negotiated with in-network providers for the emergency service furnished; (2) the amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services; or (3) the amount that would be paid under Medicare for the emergency service, patients continue to face out-of-network charges for surprise bills;
d. Out-of-network benefits are a health insurance benefit enhancement for which insureds pay an additional premium, but in recent years, out-of-network coverage has been used inappropriately as a means to diminish consumers' health insurance coverage, exposing consumers to additional costs;
e. Carriers and consumers continue to report exorbitant charges by certain health care professionals and facilities for out-of-network services, including balance billing, and in certain cases, consumers' bills are referred to collection, which contributes to the increasing costs of health care services and insurance and imposes hardships on health care consumers;
f. Health care providers and hospitals report that inadequate reimbursement from carriers and government payers is causing financial stress on safety net hospitals, deteriorating morale among providers and reduced quality of care for consumers;
g. It is, therefore, in the public interest to reform the health care delivery system in New Jersey to enhance consumer protections, create a system to resolve certain health care billing disputes, contain rising costs, and measure success with respect to these goals.
(cf: P.L.2018, c.32, s.2)
2. Section 3 of P.L.2018, c.32, s.3 (C.26:2SS-3) is amended to read as follows
3. As used in [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.):
"Carrier" means an entity that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefits plan, including: an insurance company authorized to issue health benefits plans; a health maintenance organization; a health, hospital, or medical service corporation; a multiple employer welfare arrangement; the State Health Benefits Program and the School Employees' Health Benefits Program; or any other entity providing a health benefits plan. Except as provided under the provisions of [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.), "carrier" shall not include any other entity providing or administering a self-funded health benefits plan.
"Commissioner" means the Commissioner of Banking and Insurance.
"Covered person" means a person on whose behalf a carrier is obligated to pay health care expense benefits or provide health care services.
"Department" means the Department of Banking and Insurance.
"Director" means the Director of the Division of Mental Health and Addiction Services in the Department of Human Services.
"DMAHS" means the Division of Medical Assistance and Health Services in the Department of Human Services.
"Emergency or urgent basis" means all emergency and urgent care services including, but not limited to, the services required pursuant to N.J.A.C.11:24-5.3.
"Health benefits plan" means a benefits plan which pays or provides hospital and medical expense benefits for covered services, and is delivered or issued for delivery in this State by or through a carrier. For the purposes of [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.), "health benefits plan" shall not include the following plans, policies or contracts: Medicaid, Medicare, Medicare Advantage, accident only, credit, disability, long-term care, TRICARE supplement coverage, coverage arising out of a workers' compensation or similar law, automobile medical payment insurance, personal injury protection insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.), a dental plan as defined pursuant to section 1 of P.L.2014, c.70 (C.26:2S-26) and hospital confinement indemnity coverage.
"Health care facility" means a general acute care hospital, satellite emergency department, hospital based off-site ambulatory care facility in which ambulatory surgical cases are performed, or ambulatory surgery facility, licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).
"Health care professional" means an individual, acting within the scope of his licensure or certification, who provides a covered service defined by the health benefits plan.
"Health care provider" or "provider" means a health care professional or health care facility.
"Inadvertent out-of-network services" means health care services that are: covered under a managed care health benefits plan that provides a network; and provided by an out-of-network health care provider in the event that a covered person utilizes an in-network health care facility for covered health care services and, for any reason, in-network health care services are unavailable in that facility. "Inadvertent out-of-network services" shall include laboratory testing ordered by an in-network health care provider and performed by an out-of-network bio-analytical laboratory.
"Knowingly, voluntarily, and specifically selected an out-of-network provider" means that a covered person chose the services of a specific provider, with full knowledge that the provider is out-of-network with respect to the covered person's health benefits plan, under circumstances that indicate that covered person had the opportunity to be serviced by an in-network provider, but instead selected the out-of-network provider. Disclosure by a provider of network status shall not render a covered person's decision to proceed with treatment from that provider a choice made "knowingly" pursuant to this definition.
"Machine-readable" means a format for documents that can be automatically read and processed by a computer without human intervention while ensuring no semantic meaning is lost.
"Medicaid" means the State Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).
"Medical necessity" or "medically necessary" means or describes a health care service that a health care provider, exercising his or her prudent clinical judgment, would provide to a covered person for the purpose of evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms and that is: in accordance with the generally accepted standards of medical practice; clinically appropriate, in terms of type, frequency, extent, site, and duration, and considered effective for the covered person's illness, injury, or disease; not primarily for the convenience of the covered person or the health care provider; and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that covered person's illness, injury, or disease.
"Medicare" means the federal Medicare program established pursuant to Pub.L.89-97 (42 U.S.C. s.1395 et seq.).
"Self-funded health benefits plan" or "self-funded plan" means a self-insured health benefits plan governed by the provisions of the federal "Employee Retirement Income Security Act of 1974," 29 U.S.C. s.1001 et seq.
(cf: P.L.2018, c.32, s.3)
3. Section 16 of P.L.2018, c.32 (C.26:2SS-16) is amended to read as follows:
16. [A carrier which offers a managed care plan] a. For the purposes of this section, a "carrier" means an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State, and shall include the State Health Benefits Program, the School Employees' Health Benefits Program, the Medicaid program, and a Medicaid managed care organization.
b. A carrier shall provide for an annual audit of its provider network by an independent private auditing firm. The audit shall be at the expense of the carrier and the carrier shall submit the audit findings to the commissioner or director, as applicable. The commissioner or director shall make the results of the audit available on the respective department's website. If the audit contains a determination that a carrier has failed to maintain an adequate network of providers in accordance with applicable federal or State law, in addition to any other penalties or remedies available under federal or State law, it shall be a violation of [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.) and the commissioner or director, as applicable, may initiate such action as the commissioner or director deems appropriate to ensure compliance with [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.) and network adequacy laws.
c. At a minimum, any carrier that fails to meet network adequacy requirements in accordance with applicable federal or State law shall be penalized no less than $5,000 per day until the carrier has demonstrated full compliance with the network adequacy requirements. In addition to such penalty imposed, any resident, who can demonstrate that the resident suffered harm as a result of a carrier's failure to meet its network adequacy requirement, may file a private cause of action seeking damages for demonstrated harm.
d. Within 90 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the commissioner and director shall jointly prepare a guidance document that establishes the format for the submission of the annual audit pursuant to subsection a. of this section, such guidance document shall be published on the respective department's website and submitted to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).
e. The commissioner and director shall provide to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a report by May 31st of each year that explains how the commissioner or director has enforced the terms of their respective network adequacy oversight requirements through claims analysis, market conduct reviews, secret shopper surveys, and any other means utilized.
f. Each carrier's network directory shall be made available in a downloadable, machine-readable format to support independent research, public accountability, and government oversight and ensure that carriers are meeting statutory and contractual network adequacy and access requirements. A carrier shall be expressly prohibited from seeking to protect the non-commercial use, publication, or dissemination of the carrier's network directory through copyright or any other means.
(cf: P.L.2018, c.32, s.16)
4. Section 17 of P.L.2018, c.32 (C.26:2SS-17) is amended to read as follows:
17. a. A person or entity that violates any provision of [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.), or the rules and regulations adopted pursuant hereto, shall be liable to a penalty as provided in this subsection. The penalty shall be collected by the commissioner in the name of the State in a summary proceeding in accordance with the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).
(1) A health care facility or carrier that violates any provision of [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.) shall be liable to a penalty of not more than $1,000 for each violation. Every day upon which a violation occurs shall be considered a separate violation, but no facility or carrier shall be liable to a penalty greater than $25,000 for each occurrence.
(2) A person or entity not covered by paragraph (1) of this subsection that violates the requirements of [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.) shall be liable to a penalty of not more than $100 for each violation. Every day upon which a violation occurs shall be considered a separate violation, but no person or entity shall be liable to a penalty greater than $2,500 for each occurrence.
(3) In the case of a carrier found to be out of compliance with network adequacy requirements pursuant to section 16 of P.L.2018, c.32 (C.26:2SS-16), penalties shall be imposed as set forth in section 16 of P.L.2018, c.32 (C.26:2SS-16).
b. Upon a finding that a person or entity has failed to comply with the requirements of [this act] P.L.2018, c.32 (C.26:2SS-1 et seq.), including the payment of a penalty as determined under subsection a. of this section, the commissioner may:
(1) in the case of a carrier, initiate such action as the commissioner determines appropriate;
(2) in the case of a health care facility, refer the matter to the Commissioner of Health for such action as the Commissioner of Health determines appropriate; or
(3) in the case of a health care professional, refer the matter to the appropriate professional or occupational licensing board within the Division of Consumer Affairs in the Department of Law and Public Safety for such action as that board determines appropriate.
(cf: P.L.2018, c.32, s.17)
2. This act shall take effect immediately.
